Difference Between Arbitration and Mediation

Definition of Arbitration and Mediation

I. Introduction

• Definition of Arbitration: Arbitration is a form of alternative dispute resolution (ADR) in which a neutral third party, called an arbitrator, is chosen by the parties involved to listen to the evidence and make a binding decision to resolve a dispute.
• Definition of Mediation: Mediation is also a form of ADR in which a neutral third party, called a mediator, facilitates communication between the parties involved in a dispute in an effort to reach a mutually agreed upon resolution.

Differences between Arbitration and Mediation

• Procedures used in Arbitration and Mediation:
  • Arbitration procedures typically involve the submission of evidence, witness testimony, and argument by each side to the arbitrator, who will then make a binding decision.
  • Mediation procedures involve the parties discussing the dispute with the mediator present, with the mediator guiding the conversation and helping the parties to find common ground and reach a mutually agreed upon resolution.
• Role of the Arbitrator and Mediator:
  • The arbitrator’s role is to hear evidence, witness testimony, and arguments from both parties and make a binding decision to resolve the dispute.
  • The mediator’s role is to act as a neutral third party, facilitating communication and helping the parties to find common ground and reach a mutually agreed upon resolution.
• Level of formality in Arbitration and Mediation:
  • Arbitration is typically more formal than mediation, with rules of evidence, witness testimony, and formal procedures to be followed.
  • Mediation is less formal and more conversational, with a focus on open communication and negotiation.
• Binding vs non-binding nature of decisions:
  • Arbitration decisions are binding, meaning that both parties are legally obligated to accept the decision made by the arbitrator.
  • Mediation decisions are non-binding, meaning that both parties have the freedom to accept or reject the decision made by the mediator.

Advantages and Disadvantages of Arbitration and Mediation

• Pros and cons of using Arbitration:
  • Advantages:
    • Faster and less expensive than going to trial
    • Allows the parties to choose a neutral third party with expertise in the subject matter of the dispute
    • Decisions are binding and enforceable in court
  • Disadvantages:
    • Less control over the outcome of the dispute
    • Limited appeal options
    • May be less flexible than mediation
• Pros and cons of using Mediation:
  • Advantages:
    • More flexible and less formal than arbitration
    • Encourages open communication and negotiation
    • Allows the parties to come to a mutually agreed upon resolution
  • Disadvantages:
    • Decisions are non-binding
    • May take longer to reach a resolution
    • The mediator does not have the power to make a binding decision.

It’s worth noting that both arbitration and mediation have their own set of advantages and disadvantages depending on the situation, and it’s important to consider the specific needs of a case before deciding which method to use.

Conclusion

• Summary of key points: Arbitration and mediation are both forms of alternative dispute resolution (ADR) that provide an alternative to resolving disputes through the court system. Arbitration is a more formal process where parties present evidence, witness testimony, and arguments before a neutral third-party arbitrator, who makes a binding decision to resolve the dispute. Mediation is a less formal process where a neutral third-party mediator facilitates communication between the parties to help them reach a mutually agreed-upon resolution.
• When to use Arbitration vs Mediation: Arbitration is suitable for disputes that require a binding and enforceable decision, and for disputes where the parties want a faster and less expensive process. Mediation is suitable for disputes where the parties want to maintain a relationship and where the parties want a more flexible process. It’s also suitable for disputes where the parties want to have more control over the outcome.